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Costing and Budgeting

Course Description

UTAP Funding
Funding available for this course

It is important for managers to identify cost behavior and understanding the fundamental interactions between costs and revenues in any activity. Gaining insights into the cost-volume-profit relationships enable managers to make better scare resources allocation decisions, plan activities, control costs and evaluate performance. Our working environment today has evolved with the sensitivity of cost behavior where end state of stake-holders objective is to optimize its scare resource.

In-tandem with above, when a business decide to purchase common items, the planning and purchasing processes may be quite simple but many purchasing decisions, however, do involve large commitments of resources over a long period of time. Obviously, business want to be careful with such planning activities commonly known as the Budgeting.

This course teaches in-depth Principles & Application on Cost Behavior and budgeting evaluation models together with illustration.

There will be hand on exercises, questions and problem solving with answer provided after the sharing session.

Course Objective:

Upon completion of this course, participants will be able to;

  • Identify cost behavior patterns and relevant ranges of activity
  • Explain the relationship between fixed costs, variable costs and activity levels
  • Discern between discretionary fixed cost and committed fixed costs
  • Separate mixed costs into fixed and variables cost components
  • Calculate the break-even point and explain its relationship with contribution margin
  • Estimate the effect of changes in costs, process and volume on profit
  • Use the margin of safety ratio in accessing risk
  • Describe the nature and characteristics of the budgeting process
  • Use discounted cash flow methods to evaluate budgeting projects
  • Utilize budgeting evaluation methods that do not use discounted cash flows
  • Identity and explain the strengths and weaknesses of the various budgeting models
  • Use the capital budgeting evaluation models to develop an expenditure budget

Target Audience:

Managers, Head of Department, Vice President, CFO, COO whom are required to plan and control costs and plan for budget both at department, business segment, company, division and/ or regional level.

Course Content

Lesson 1: Cost Behaviour

  • Fixed Costs, Variable Costs, Mixed Costs, Semivariable Costs, Semifixed Costs
  • Manageable or Controllable Costs
  • Cost Estimation Techniques

Lesson 2: Cost-Volume-Profit Relationships

  • Break-Even Analysis
  • Contribution Margin
  • CVP Analysis
  • Profit-Volume Chart
  • Operations Beyond the Relevant Range
  • Margin of Safety Ratio
  • Finding the Weighted Average Contribution Margin
  • Individual Product Line Break-Even Points

Lesson 3: The Capital Budgeting Process

  • Project Identification
  • Estimating the Cost and benefits of a Project
  • Project Evaluation
  • Development of the Expenditure Budget
  • Project Evaluation Methods

Lesson 4: Discounted Cash Flow Methods

  • Internal Rate of Return
  • Net Present value

Lesson 5: Other Project Evaluation Methods

  • Payback
  • Bailout, Payback Reciprocal
  • Accounting Rate of return

Lesson 6: Estimating The Cost Capital

  • Cost of Common Stock
  • Cost of Preferred Stock
  • Cost of Long-Term Debt
  • Weighted Average Cost of Capital

Course Duration

2 Days

Course Time

9am to 5pm

Course Fee


(Group Discount of 10% for 3 or more participants)

Course Dates